Enablers and barriers to the involvement of accountants in integrated reporting

Abstract

Purpose With the increasing adoption of integrated reporting and the subsequent interest of the accounting discipline in its development, this paper aims to examine the enablers and barriers to the involvement of accountants in integrated reporting. Design/methodology/approach The paper adopts a case study approach by collecting interview data from six organisations that have adopted integrated reporting internationally. In the selected organisations, face-to-face and telephone interviews were conducted with professionals who are involved in the preparation of an integrated report. The interviewees in this study included key integrated report preparers including accountants, corporate reporting managers, sustainability managers and other report preparers. Institutional entrepreneurship provided the theoretical insights for this study. Findings The study found that accountants’ expertise in corporate reporting and especially their knowledge of the assurance process was one of the major reasons why they were involved in integrated reporting. Accountants’ in-depth understanding of an organisation in addition to their general analytical and interpersonal skills were also found to be useful in preparing an integrated report. However, the voluntary nature of integrated reporting along with the lack of sufficient guidelines deterred accountants from being involved in integrated reporting. The study also found that accountants themselves did not see value in integrated reporting and found it challenging to convert numerical information to narratives, thus limiting their involvement in integrated reporting. Research limitations/implications Whilst prior studies have underlined accountants’ institutionalised practices, this study uncovers the strategies applied by accountants to maintain their institutionalised practices. The specific application of the institutional entrepreneurship concept identifies mechanisms and strategies through which accountants restrict their practices to narrow taken-for-granted roles. Practical implications This study uncovers practical implications by highlighting the factors that limit the involvement of accountants within integrated reporting. One of the major implications identified relates to the training of accountants to apply their existing skills and expertise in non-financial reporting to contribute effectively to multi-disciplinary teams that contribute towards integrated reporting in organisations. This study also provides an impetus for the International Integrated Reporting Council to provide more guidance for preparing an integrated report. Originality/value This is one of the initial studies that has explored the enablers and barriers to the involvement of accountants in integrated reporting through its focus on organisations that are already practising this form of reporting. The use of institutional entrepreneurship theory adds to the theoretical insights for exploring the involvement of the various actors in integrated reporting.

Sustainability, non-financial, integrated, and value reporting (extended external reporting): a conceptual framework and an agenda for future research

“…The papers related to “proactivity” and “accountability” provide useful insights for organisations initiating their non-financial or integrated reporting journey. The findings explain how organisations are capturing information on value creation and emphasise the importance of adequate management and accounting systems in supporting EER (Arora et al , 2022; Hsiao et al , 2022b; Lakshan et al , 2022; Steenkamp and Roberts, 2022). The papers related to “accountability” and “legitimacy” echoes the predominant voice in the extant literature that there are differences between stakeholder expectations and disclosure content.…”

“…“Visibility” is added as another factor despite overlaps with “company size and age”, as it captures other company features such as media exposure (Dienes et al , 2016; Hahn and Kühnen, 2013). Further, we add “auditors” given that auditors have been identified as change agents for non-financial reporting practices (Andrew and Baker, 2020; Arora et al , 2022), and “ownership” and “partnerships” as these characteristics have been found to influence non-financial reporting practices (Adler et al , 2018; Chi et al , 2020; Muttakin and Subramaniam, 2015).…”

“…Bridges et al (2022) suggest integrated reporting has potential to revolutionise corporate reporting and improve existing financial reporting practices. Lakshan et al (2022), Steenkamp and Roberts (2022) and Arora et al (2022) used case study or interview approaches to examine reporting processes and how organisations are capturing information on value creation. These findings are useful for organisations that are planning to start their non-financial or integrated reporting journey.…”

“…In examining the involvement of accountants in the process of preparing integrated reports, Arora et al (2022) find accountants' expertise in corporate reporting and assurance was the main reason for their involvement, and their knowledge about an organisation, analytical skills and interpersonal skills were useful in the preparation process. However, accountants were often deterred from being involved due to the voluntary nature of integrated reporting and the lack of sufficient guidelines.…”

“…Additionally, the study finds accountants did not see value in integrated reporting, which also limited their involvement. Arora et al (2022) suggest furthering accountants' education and training in non-financial reporting so they can further contribute to multi-disciplinary teams for integrated reporting.…”